EU Bail-Ins are here: Detroit follows same template. Who's next?

EU bank bailout roulette awaits Monte dei Paschi investors

By Laura Noonan

LONDON | Sun Sep 29, 2013 4:39am EDT

(Reuters) - Investors awaiting the finer points of Monte dei Paschi's restructuring plan could soon find themselves wishing their bank had run aground at another time and place in the euro zone financial crisis.
After approving more than 5 trillion euros of state aid to its financial system over the past five years, the European Union has switched the burden of bank bailouts away from taxpayers and onto shareholders, bondholders and big depositors.

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Swiss regulator backs bank bail-ins before government rescues

By Katharina Bart

ZURICH | Wed Aug 7, 2013 10:40am EDT

(Reuters) - Switzerland shouldn't bail out its largest banks again before asking creditors and shareholders to stump up, the local financial regulator said on Wednesday.
Authorities have been grappling since the collapse of U.S. investment bank Lehman Brothers five years ago with the question of how banks regarded as systemically important - or too big to fail (TBTF) - can be recapitalized without causing panic or needing taxpayer cash.
In Switzerland, regulator FINMA has joined with the Swiss National Bank (SNB) to enforce stiffer regulator on UBS (UBSN.VX) and Credit Suisse (CSGN.VX), which form the backbone of a financial industry that generates 6 percent of the Alpine nation's gross domestic product.
FINMA has now backed "bail-ins" by creditors should UBS, rescued by the Swiss government nearly five years ago, or Credit Suisse risk collapse.
The regulator recommended spreading bank losses across a range of creditors, including shareholders, holders of contingent convertible (CoCo) instruments (which may convert into equity under certain conditions) and owners of debt including senior debt.

The Detroit Bail-In Template: Fleecing Pensioners to Save the Banks

Tuesday, 06 August 2013 09:04 By Ellen Brown, Web of Debt | News Analysis Detroit, Michigan. (Photo: Casino Jones)The Detroit bankruptcy is looking suspiciously like the bail-in template originated by the G20’s Financial Stability Board in 2011, which exploded on the scene in Cyprus in 2013 and is now becoming the model globally. In Cyprus, the depositors were “bailed in” (stripped of a major portion of their deposits) to re-capitalize the banks. In Detroit, it is the municipal workers who are being bailed in, stripped of a major portion of their pensions to save the banks.
Bank of America Corp. and UBS AG have been given priority over other bankruptcy claimants, meaning chiefly the pensioners, for payments due on interest rate swaps they entered into with the city.